We are identified to buy another residential property (jointly) and should we have to invest the entire capital gains (not sure what is the value) before 31-Mar-2012? If not, till such time we invest in another property where should I park the capital gain amount? Request your reply at the earliest

The gains would be divided between you and your wife. New property cost should be more than 16.7 lakh in order to save income tax fully.

New property must be bought within two years from date of sale of old property. If you are able to buy new property and get possession before 31st July 2012 (last date of income tax return filing), capital gains need not to be invested in any special account.

But if you unable to get possession of new property before 31st July, you should invest capital gains amount into capital gain scheme account and pay to new flat seller from this account.

Thank you for quick response Pankaj. As I have mentioned, we have already identified new residential flat (which is under construction is expected to give for possession in Feb - 2013). We have already paid advance and next payment is due in May - 2012. Till such time, can i invest capital gains in bank FD and get some interest out of it or Do we need to invest in capital gain scheme account immediately. Please clarify.